Bill Text: IA HF2228 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act creating a tax credit against the individual and corporate income taxes, the franchise tax, insurance premiums tax, and the moneys and credits tax for a charitable contribution to certain institutions engaged in regenerative medicine research and including applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-02-14 - Subcommittee: Maxwell, Jacoby and Pettengill. H.J. 272. [HF2228 Detail]
Download: Iowa-2017-HF2228-Introduced.html
House File 2228 - Introduced HOUSE FILE BY MAXWELL A BILL FOR 1 An Act creating a tax credit against the individual and 2 corporate income taxes, the franchise tax, insurance 3 premiums tax, and the moneys and credits tax for a 4 charitable contribution to certain institutions engaged in 5 regenerative medicine research and including applicability 6 provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5641YH (2) 87 mm/jh PAG LIN 1 1 Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The general 1 2 assembly finds that research on regenerative medicine has the 1 3 potential to produce valuable advances in the field of medicine 1 4 and that an increase in such research in this state could 1 5 result in a substantial benefit to the state and its citizens. 1 6 The purpose of the regenerative medicine research tax credit 1 7 enacted in this Act is to induce taxpayers to make monetary 1 8 contributions to regenerative medicine research institutions 1 9 above amounts that would have been contributed absent state 1 10 support, thereby increasing the overall level of funding 1 11 available for regenerative medicine research in this state. 1 12 Sec. 2. Section 2.48, subsection 3, Code 2018, is amended by 1 13 adding the following new paragraph: 1 14 NEW PARAGRAPH. 0h. In 2021, the regenerative medicine 1 15 research tax credit available under section 422.10C. 1 16 Sec. 3. NEW SECTION. 422.10C Regenerative medicine research 1 17 tax credit. 1 18 1. Definitions. For purposes of this section, "certified 1 19 regenerative medicine research institution" means an organization 1 20 meeting the requirements of subsection 2 and certified by the 1 21 department pursuant to that subsection. 1 22 2. Regenerative medicine research institution certification. 1 23 a. An organization may apply to the department in the manner 1 24 prescribed by the department to be certified as a regenerative 1 25 medicine research institution. 1 26 b. In order to be certified as a regenerative medicine 1 27 research institution, an organization shall meet all of the 1 28 following requirements: 1 29 (1) The organization is organized under chapter 504 and 1 30 qualifying under section 501(c)(3) of the Internal Revenue Code 1 31 as an organization exempt from federal income tax under section 1 32 501(a) of the Internal Revenue Code. 1 33 (2) The organization has a principal place of business in 1 34 this state. 1 35 (3) The organization is directly engaged in research in 2 1 this state solely using adult stem cells, which research is 2 2 designed to improve patient care through the development and 2 3 dissemination of novel clinical therapies for the functional 2 4 repair and replacement of diseased tissues and organs, 2 5 including research for the treatment of cancer. 2 6 (4) The organization spends at least fifty=one percent of 2 7 its annual budget on laboratory or clinical research that is 2 8 conducted by the organization and that meets the requirements 2 9 of subparagraph (3). 2 10 (5) The organization does not operate as a conduit 2 11 for research by another organization by redistributing a 2 12 contribution it receives to that other organization. 2 13 (6) The organization is not a postsecondary institution or 2 14 an entity receiving twenty=five percent or more of its annual 2 15 budget from a postsecondary institution. 2 16 (7) The organization agrees to provide to the department all 2 17 of the following information: 2 18 (a) Information to verify that the organization meets the 2 19 requirements of subparagraphs (1) through (6), including but 2 20 not limited to information relating to funding received by the 2 21 organization and expenditures made on research and other items 2 22 by the organization. 2 23 (b) Information to verify the receipt, donor identity, 2 24 value, and tax credit eligibility of contributions received by 2 25 the organization. 2 26 (c) Information regarding the amount of charitable 2 27 contributions received by the organization prior to 2 28 certification under this section, and the amount of charitable 2 29 contributions received for each fiscal year the organization is 2 30 a certified regenerative medicine research institution. 2 31 (d) Any other information reasonably required by the 2 32 department in order to properly administer this section. 2 33 c. Unless certification is revoked pursuant to paragraph 2 34 "d", a certification received pursuant to this subsection shall 2 35 be valid for one year, at which time the organization may apply 3 1 to the department in the manner prescribed by the department to 3 2 become recertified pursuant to this subsection. 3 3 d. An organization shall notify the department in a timely 3 4 manner of any changes that affect the organization's ability 3 5 to qualify as a certified regenerative medicine research 3 6 institution. The department shall revoke the certification of 3 7 an organization certified pursuant to this subsection if that 3 8 organization subsequently fails to meet the requirements of 3 9 paragraph "b". The revocation of a certification under this 3 10 paragraph shall not prohibit an organization from subsequently 3 11 applying to be certified under this subsection. 3 12 3. Application. 3 13 a. To receive a tax credit under this section, a taxpayer 3 14 must submit an application to the department in the manner and 3 15 form prescribed by the department on or after the date of the 3 16 charitable contribution to the certified regenerative medicine 3 17 research institution for which the tax credit is sought. 3 18 b. The department shall issue tax credits and related 3 19 tax credit certificates on a first=come, first=served basis 3 20 in the order the applications are received until the maximum 3 21 amount of tax credits authorized pursuant to subsection 4 3 22 is reached. If for a fiscal year the maximum amount of tax 3 23 credits applied for exceeds the amount specified in subsection 3 24 4, the department shall establish a wait list for tax credits. 3 25 Valid applications received but not approved by the department 3 26 shall be placed on a wait list in the order the applications 3 27 were received and those applicants shall be given priority for 3 28 receiving tax credits in succeeding fiscal years. Placement 3 29 on a wait list pursuant to this paragraph shall not constitute 3 30 a promise binding the state. The availability of a tax 3 31 credit and approval of a tax credit application pursuant to 3 32 this section in a future fiscal year is contingent upon the 3 33 availability of tax credits in that particular year. 3 34 4. Maximum tax credit amounts. The maximum aggregate amount 3 35 of tax credits issued in a fiscal year pursuant to this section 4 1 shall not exceed ten million dollars. 4 2 5. Regenerative medicine research tax credit. 4 3 a. The taxes imposed under this division, less the credits 4 4 allowed under section 422.12, or the taxes imposed in division 4 5 III or V of this chapter, or the taxes imposed in chapter 432, 4 6 or the moneys and credits tax imposed in section 533.329, shall 4 7 be reduced by a regenerative medicine research tax credit equal 4 8 to sixty percent of a taxpayer's charitable contribution to a 4 9 certified regenerative medicine research institution. 4 10 b. An individual may claim the tax credit allowed a 4 11 partnership, limited liability company, S corporation, estate, 4 12 or trust electing to have the income taxed directly to the 4 13 individual. The amount claimed by the individual shall be 4 14 based upon the pro rata share of the individual's earnings of 4 15 the partnership, limited liability company, S corporation, 4 16 estate, or trust. 4 17 c. For tax credit certificates issued by the department in 4 18 the fiscal year during which the charitable contribution is 4 19 made, the tax credit shall be claimed for the applicant's tax 4 20 year during which the charitable contribution is made. For tax 4 21 credit certificates issued in any fiscal year following the 4 22 fiscal year during which the charitable contribution is made, 4 23 the tax credit shall be claimed for the applicant's tax year 4 24 during which the tax credit is issued by the department. For 4 25 an individual claiming the tax credit allowed another entity 4 26 pursuant to paragraph "b", the tax credit shall be claimed for 4 27 the individual's tax year beginning on or after the first day 4 28 of the tax year for which the other entity was allowed to claim 4 29 the tax credit. 4 30 d. Any tax credit in excess of the taxpayer's tax liability 4 31 is not refundable but the excess for the tax year may be 4 32 credited to the tax liability for the following four years or 4 33 until depleted, whichever is earlier. A tax credit shall not 4 34 be carried back to a prior tax year. 4 35 e. (1) To claim a tax credit under this section, a taxpayer 5 1 shall include one or more tax credit certificates with the 5 2 taxpayer's tax return. 5 3 (2) The tax credit certificate shall contain the taxpayer's 5 4 name, address, tax identification number, the amount of the 5 5 credit, and any other information required by the department. 5 6 (3) The tax credit certificate, unless rescinded by the 5 7 department, shall be accepted by the department as payment 5 8 for the taxes imposed under this division, division III or V 5 9 of this chapter, chapter 432, and section 533.329, subject 5 10 to any conditions or restrictions placed by the department 5 11 upon the face of the tax credit certificate and subject to the 5 12 limitations of this section. 5 13 f. The amount of the charitable contribution for which the 5 14 tax credit is claimed shall not be deductible in determining 5 15 taxable income for state tax purposes. 5 16 Sec. 4. Section 422.33, Code 2018, is amended by adding the 5 17 following new subsection: 5 18 NEW SUBSECTION. 27. The taxes imposed under this division 5 19 shall be reduced by a regenerative medicine research tax credit 5 20 in the same manner, for the same amount, and under the same 5 21 conditions as provided in section 422.10C. 5 22 Sec. 5. Section 422.60, Code 2018, is amended by adding the 5 23 following new subsection: 5 24 NEW SUBSECTION. 14. The taxes imposed under this division 5 25 shall be reduced by a regenerative medicine research tax credit 5 26 in the same manner, for the same amount, and under the same 5 27 conditions as provided in section 422.10C. 5 28 Sec. 6. NEW SECTION. 432.12N Regenerative medicine research 5 29 tax credit. 5 30 The taxes imposed under this chapter shall be reduced by a 5 31 regenerative medicine research tax credit in the same manner, 5 32 for the same amount, and under the same conditions as provided 5 33 in section 422.10C. 5 34 Sec. 7. Section 533.329, subsection 2, Code 2018, is amended 5 35 by adding the following new paragraph: 6 1 NEW PARAGRAPH. m. The moneys and credits tax imposed 6 2 under this section shall be reduced by a regenerative medicine 6 3 research tax credit in the same manner, for the same amount, 6 4 and under the same conditions as provided in section 422.10C. 6 5 Sec. 8. APPLICABILITY. This Act applies to charitable 6 6 contributions to a certified regenerative medicine research 6 7 institution made on or after January 1, 2019. 6 8 Sec. 9. TAX CREDIT CERTIFICATE ISSUANCES. Tax credit 6 9 certificates available pursuant to the regenerative medicine 6 10 research tax credit enacted in this Act shall not be issued by 6 11 the department of revenue prior to July 1, 2019. 6 12 EXPLANATION 6 13 The inclusion of this explanation does not constitute agreement with 6 14 the explanation's substance by the members of the general assembly. 6 15 This bill provides a tax credit against the individual or 6 16 corporate income tax, the franchise tax, the insurance premiums 6 17 tax, and the moneys and credits tax for 60 percent of a 6 18 taxpayer's charitable contribution to a certified regenerative 6 19 medicine research institution. 6 20 Regenerative medicine research institutions must apply 6 21 for and receive certification from the department of revenue 6 22 (department) as described in the bill in order for charitable 6 23 contributions to that institution to qualify for the tax 6 24 credit. To qualify for certification, a regenerative medicine 6 25 research institution must be a tax=exempt organization under 6 26 section 501(c)(3) of the Internal Revenue Code, must have 6 27 its principal place of business in Iowa, must be directly 6 28 engaged in research in this state solely using adult stem 6 29 cells designed to develop novel clinical therapies for the 6 30 functional repair and replacement of diseased tissues and 6 31 organs, including cancer research, must spend at least 51 6 32 percent of its annual budget on such research, and must agree 6 33 to provide the department with certain information necessary 6 34 to verify eligibility for the tax credits. In addition, a 6 35 regenerative medicine research institution must not be a 7 1 conduit for research by another organization, and must not be 7 2 a postsecondary institution or an entity receiving 25 percent 7 3 or more of its annual budget from a postsecondary institution. 7 4 Certification by the department is valid for one year, at which 7 5 time regenerative medicine research institutions may apply for 7 6 recertification. 7 7 In order to claim the tax credit, a taxpayer must submit an 7 8 application to the department as described in the bill on or 7 9 after the date of the charitable contribution and receive a tax 7 10 credit certificate. No more than $10 million in tax credit 7 11 certificates may be issued per fiscal year. If applications 7 12 for the tax credit exceed that amount in a fiscal year, the 7 13 department is required to establish a wait list in the order 7 14 the applications were received and those applications will 7 15 receive priority for receiving tax credits in succeeding years. 7 16 The bill provides procedures for when a tax credit shall be 7 17 claimed by a taxpayer. The tax credit is nonrefundable, but 7 18 any amount in excess of the taxpayer's tax liability may be 7 19 carried forward for up to four years. The tax credit cannot 7 20 be carried back to a prior tax year. The bill prohibits 7 21 contributions receiving a tax credit from also being deducted 7 22 as a charitable contribution. 7 23 Finally, the bill includes legislative findings and a 7 24 legislative purpose for the tax credit, and adds the tax 7 25 credit to the list of tax expenditures to be reviewed by the 7 26 legislative tax expenditure committee beginning in 2021. 7 27 The bill applies to charitable contributions to a certified 7 28 regenerative medicine research institution made on or after 7 29 January 1, 2019. However, the bill provides that tax credit 7 30 certificates shall not be issued by the department prior to 7 31 July 1, 2019. LSB 5641YH (2) 87 mm/jh
